Cherkizovo volumes up but hit by lower sales prices

Russian meat and poultry company Cherkizovo Group reported sales volume increases for both its turkey and broiler division during the first quarter of the 2018 fiscal year, but lower sales prices limited overall profitability.

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(Cherkizovo Group)
(Cherkizovo Group)

Russian meat and poultry company Cherkizovo Group reported sales volume increases for both its turkey and broiler division during the first quarter of the 2018 fiscal year, but lower sales prices limited overall profitability.

Tambov Turkey sales

In a press release in which Cherkizovo announced sales results for the first quarter of the fiscal year, the company reported that Tambov Turkey operations operated at full capacity during the quarter, which reflected in a significant year-over-year increase in sales volume.

Tambov Turkey, which is a joint venture between Cherkizovo and Spanish company Grupo Fuertes, accomplished a sales volume of 9,740 metric tons, a 192 percent increase from the 3,340 metric tons of volume for the first quarter of fiscal year 2017. The first quarter sales volume was also a 1 percent increase from the volume of the most recent quarter, the company stated.

While Tambov Turkey’s sales volume saw a sharp increase, the sales prices saw a sharp decrease. The company reported that the sales prices “came under pressure with the return of a major competitor to the market at the end of 2017.” The price went down 28 percent to RUB128.97 (US$2.08) per kilogram on a year-over-year basis, while the price dropped 10 percent when compared to the fourth quarter of fiscal year 2017.

Chicken sales

Cherkizovo Group reported a sales volume of 137,500 metric tons for the first quarter, which was about a 10 percent increase when compared to the same period of the 2017 fiscal year, but about equal to that of the most recent quarter.

The sales price dropped 11 percent on a year-over-year basis, and 4 percent on a quarter-over-quarter basis to RUB82.07 (US$1.32) per kilogram.

The company attributed the drop in sales price when compared to the fourth quarter of 2017 to “the seasonal slowdown effect.”

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